SYNOPSIS ON

COMPETITION LAW AND IPR AT A CROSSROAD

BY: SHIKHA ROHRA

3RD YEAR, HNLU RAIPUR

Introduction
Competition benefits consumers because it tends to lead to the optimum choice of products and
services in terms of price, quantity, quality and consumer choice.1 By encouraging competitive
behavior, competition law thus seeks to maximize consumer welfare. IPRs stimulate innovation
by protecting inventors, thereby encouraging them to bring new or improved products and
processes onto the market, which also benefits consumers. Hence, on first sight competition law
and IPRs do not seem to clash.2 However, in the discussion on the interface between competition
law and IP law, signs of conflict cannot be ignored. Generally, one seems to be aimed at what the
other essentially tries to prevent. While competition law seeks to achieve economic efficiency by
promoting competition and free operation of the market, IPRs create monopoly rights that can be
used to frustrate this.3 This raises the question whether a hierarchy exists between the two
concepts; will one prevail over the other in situations of conflict?

Competition law and intellectual property rights (IPRs) have evolved historically as two separate
systems of law. There is a considerable overlap in the goals of the two systems of law because
both are aimed at promoting innovation and economic growth. Yet there are also potential
conflicts owing to the means used by each system to promote those goals. IP laws generally offer
a right of exclusive use and exploitation to provide a reward to the innovator, to provide an
incentive to other innovators and to bring into the public domain innovative information that
might otherwise remain trade secrets. Competition authorities regulate near monopolies, mergers
and commercial agreements with the aim of maintaining effective competition in markets.

1
To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, Federal Trade
Commission, October 2003, p. 3.
2
Dutch Competition Authority (NMA) report, Is de Mededingingswet ICTproof? May 2002, p. 23.
3
Cotter T.F., “Intellectual Property and the Essential Facilities Doctrine”, 44 Antitrust Bulletin 1, 1999, p. 227.
 Intellectual Property Rights (IPR) and Competition Law are both founded with the purpose of
achieving economic development, technological advancement and consumer welfare. IPR are
legal rights governing the use of such creations. This term covers a bundle of rights, such as
patents, trademarks or copyrights, each different in scope and duration with a different purpose
and effect.4 Competition law seeks to prevent certain behavior that may restrict competition to
detriment consumer welfare. In short run, IPR encourages innovation and new products in the
market, whereas in long run- Competition Law promotes consumer welfare by introducing new
products to the market and maintaining the qualities of the goods in the market. Thus both are
complementary means of promoting innovation, technical progress and economic growth to the
benefit of consumers and the whole economy. IPRs and competition are normally regarded as
areas with conflicting objectives. The reason is that IPRs, by designating boundaries within
which competitors may exercise monopolies over their innovation, appear to be against the
principles of competitive market and level playing fields sought by competition rules, in
particular the restrictions on horizontal and vertical restraints, or on the abuse of dominant
positions. IP Laws are monopolistic in nature. They guarantee an exclusive right to the creators
and owners of work which are a result of human intellectual creativity. Also they prevent
commercial exploitation of the innovation by others. This legal monopoly may, depending on the
unavailability of substitutes in the relevant market, lead to market power and even monopoly as
defined under competition law. It is an advantage granted to the owner over the rest of the
industry or sector. When this advantage or dominant position is abused, it creates a conflict
between IPR and competition law.5

The detailed analysis of both the streams- IPRs and competition law direct us to the conclusion
that both have overlapping issues which can’t be dealt in isolation. Despite both are in essence
poles apart, however, their goals and objectives are converging than conflicting as understood in
general parlance. Despite the fact that there are intricacies and sensitive issues, both the streams
have managed to reconcile and strike a middle path in order to ensure the fulfillment of the
ultimate objective of common good and protection of consumer welfare.

4
Jayashree Watal, Intellectual Property Rights in WTO and Developing Countries, 2001 (Oxford University Press) ,
at 1-5.
5
Adv. Vishnu S, Conflict Between Competition Law And Intellectual Property Rights (September 13, 2016)
http://www.articlesbase.com/intellectual-property-articles/conflict-between-competition-law-and-intellectual-
property-rights- 3106578.html#ixzz0yxtT0wdR
 RESEARCH METHODOLOGY

This research is descriptive and analytical in nature. Secondary and Electronic resources have
been largely used to gather information and data about the topic.

Books and other reference as guided by Faculty of the subject and Library staff has been
primarily helpful in giving this project a firm structure. Websites, dictionaries and articles have
also been referred.

OBJECTIVES

The objective of this project is to study the intersection and clash of Competition law and IPRs. I
mainly aim at studying the position of such clash in India under provisions of Indian
Competition Act, 2002 and under the judicial precedents. I also intend to look in the principle
applicable in other jurisdictions. It mainly includes studying the position in United States,
European Union and under TRIPS. I have aim at studying the emerging jurisprudence on the
topic in developing countries.
 BIBLIOGRAPHY
 To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy,
Federal Trade Commission, October 2003, p. 3.
 Dutch Competition Authority (NMA) report, Is de Mededingingswet ICTproof? May
2002, p. 23. Cotter T.F., “Intellectual Property and the Essential Facilities Doctrine”, 44
Antitrust Bulletin 1, 1999, p.227.
 Jayashree Watal, Intellectual Property Rights in WTO and Developing Countries, 2001
(Oxford University Press), at 1-5.
 Adv. Vishnu S, Conflict Between Competition Law And Intellectual Property Rights
(September 13, 2016) http://www.articlesbase.com/intellectual-property-articles/conflict-
between-competition-law-and-intellectual-property-rights-
3106578.html#ixzz0yxtT0wdR